Regional to increase basic cable rates after CRTC OKs deregulation

Regional Cablesystems Inc will be raising the price of basic cable in its Sudbury and Timmins ON systems following the CRTC’s decision not to alter a 1998 policy that previously remained untested. The CRTC agreed on Oct. 4 to deregulate basic cable rates in those two Regional markets, as well as in St. Thomas and Woodstock ON, which are served by Rogers Cable Inc – Decision 2001-630. "Our lineup for basic will remain the same, but we will increase the price, while our discretionary packages may be adjusted downward," says Andrea Zizman, director of marketing at Regional’s Northern Division. Regional must wait 60 days until after the CRTC decision before it raises the price of basic cable. That’s a scenario similar to what the president and CEO of Vision TV predicted would happen in the CRTC proceeding. Bill Roberts warned that deregulation would result in higher prices for basic cable and lower prices for discretionary tiers (CCR, Aug. 2/01). The CRTC decision was by majority vote, with commissioner Andrew Cardozo filing a written dissent (see Newsmaker on page 8 for his reasoning). Previously, cablecos could price their discretionary tiers at whatever level they wanted, but they had to apply to the CRTC if they wanted to increase basic rates. Zizman says the deregulation of the basic cable rates will allow Regional to standardize prices across the two systems. A basic package of 38 channels now costs $21.81/month in Timmins and $19.81/month in Sudbury. Like Rogers, she also argues that the change will put Regional on a level playing field with satellite TV distributors Bell ExpressVu LP and Star Choice Communications Inc, whose basic packages are not rate-regulated. "It also gives us the pricing flexibility to charge less for new technology. For example, we just removed the rental cost of a digital box," she notes, adding that Regional expects to lose some customers after it increases the price of its basic service. "But our basic package is a good package, and it is not our intention to overprice it." In May, Rogers became the first cableco in Canada to apply for rate deregulation under the Broadcasting Distribution Regulations, which allow for basic rate deregulation if a Class 1 system has lost 5 per cent of its subscribers and there is competition in the market (CCR, May 24/01). When Rogers filed its application, showing it had lost more than that threshold in St. Thomas and Woodstock, the CRTC initiated a process to "thoroughly examine all of the issues" regarding the matter – PN 2001-53. Just after the CRTC initiated that process, Regional filed its own application for basic rate deregulation, stating that it had lost 10.87 per cent of its customers in Sudbury and 14.58 per cent in Timmins. Zizman says Regional had not been influenced by Rogers’ move, but had independently moved for deregulation. "We had already started our process (of applying for deregulation), when we found out Rogers had done a similar thing," she told CCR. Industry observers predict the decision could lead to more applications for basic rate deregulation. For example, Cogeco Cable Inc, which filed a submission in support of Rogers’ application, has hinted that it may seek similar basic rate relief.

Regional to increase basic cable rates after CRTC OKs deregulation

Broadcast | October 11, 2001

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